Colombia is marked by strong regional differences in both its economy and culture, shaped by a diverse geography. A new report divides the country into four main regions, each with unique structural characteristics and development stages.
The first region includes departments such as Bogotá, Antioquia, Valle del Cauca, Cundinamarca, Risaralda, Quindío, Caldas, Atlántico, Boyacá, and San Andrés y Providencia. These areas are more urbanized and connected, have diversified economies focused on services and industry, and possess advanced institutional capacities.
The second group consists of hydrocarbon-producing departments like Meta, Arauca, Casanare, Cesar, and Putumayo. These regions have high incomes but are less economically diversified and face significant risks from potential decarbonization efforts.
A third group contains departments with intermediate incomes that share mixed traits from the other categories. This includes Cauca, Huila, Norte de Santander, Nariño, Tolima, Caquetá, Córdoba, Bolívar, Magdalena, and Sucre.
The fourth region comprises Amazonas, Guainía, Chocó, La Guajira, Vichada, Guaviare, and Vaupés—areas characterized by low incomes but great natural wealth along with high unmet basic needs.
According to the report’s analysis: "The richest departments are better connected and more urbanized but far from the coasts and face urban challenges that hinder agglomeration synergies. This produces a domestic market-focused economic model with low competitiveness and dynamism." The report further notes that these dynamics contribute to persistent low productivity and geographic fragmentation within Colombia. Urban stagnation has led to lower wages in cities while also encouraging agricultural expansion into forests—raising concerns about increased deforestation.
Despite these challenges some regions have benefited from changes in global value chains. The report states: "Colombia gained markets worth US$730 million due to trade diversion from China to the United States," which positively impacted 0.3 percent of Colombia's GDP. However most gains were concentrated in wealthier departments though there were productive links allowing other regions to benefit as well.
To address disparities across Colombian territory the report recommends several strategies:
- Closing opportunity gaps through improved human capital development.
- Reforming Colombia’s General Participation System (SGP) for more efficient resource transfers between national and subnational governments.
- Implementing horizontal growth policies including macroeconomic stability stronger financial markets access to international markets with low tariffs and an improved business environment.
- Complementing broad policies with place-based approaches tailored for specific regional needs such as promoting digital services ecotourism or sustainable agriculture in lower-income areas; diversifying economies in hydrocarbon-dependent regions; or reducing transport costs for high-income areas to improve competitiveness.
"Actions that could reduce these inefficiencies include clarifying which level of government is responsible for which functions and expenditures strengthening the autonomy of subnational governments in managing their resources and conditioning intergovernmental transfers to subnational governments on their performance," according to the report.
These recommendations aim at boosting growth across all Colombian regions while avoiding inefficient spending or unsustainable strategies.